3:31:35 PM | 11/4/2007
Hanoi People’s Committee has reported there are 9,552 newly licensed businesses with a total capital of VND 32,814 billion in the city. From 2000 to 2006, 42,426 businesses were licensed in the city, with total capital of VND 101,560 billion.
Economists note that private enterprises have become a dynamic, creative, efficient and highly competitive economic sector, which is an important factor in economic growth and job creation.
Satisfactory results
Mr Le Van Tien, deputy chief of Industrial Department, said private enterprises have made a positive contribution to the city's socioeconomic development. The number of private enterprises has increased seven times from 2000. This is much greater than in all 12 provinces of the Red River Delta combined. Thousands of Hanoi private enterprises have invested in neighbouring areas such as Hung Yen, Vinh Phuc, Bac Ninh, and Ha Nam, leading to strong growth of the economic structure in these areas. Some enterprises such as Hoa Phat Inc, T&T Inc, CMC Inc, and Viet A Inc, have been interdisciplinary corporations. Also, they have helped to create more and more services and goods to satisfy the demand of domestic and foreign consumers.
Dao Ngoc Thanh, a director of Thanh Nam Investment and Construction joint stock, revealed there is no better guarantee for his company’s sustainable development than stimulating investment. This pushes the company into huge building projects, such as the Van Giang trading and tourism centres, supermarkets and leasing offices, and workshops for wooden furniture and mechanics. Duong Van Binh, a general manager of 10/10 garment and textile company, added that besides investment activities, the company has a good record in training human resources, meeting the demand for increased output and market expansion.
From the angle of quality
According to economists, the rapidly growing number of enterprises has outpaced operation quality. This is mainly caused by unclear orientation and inadequate preparation for key business factors, which cause many newly licensed enterprises to fail in developing their operations, not even registering a tax code to put their business activities to work.
Private enterprises have remained scattered, small and spontaneous activities. Eighty five per cent of them, with capital less than VND 10 billion, focus on sectors creating short-term profit, with low investment cost. Few enterprises pour their capital into high technology or large scale production. Indeed, some sectors such as agriculture and forestry, manufacturing technology, technology science, construction and transport very much need new technology but receive low capital input. Particularly, labour policies are not well applied in private enterprises. For example, contract workers in the private enterprises are only 70 per cent, compared with 97 per cent in state owned and foreign invested enterprises. Income in private enterprises is equal to only 75 per cent that in state owned enterprises, and 45 per cent in foreign invested enterprises. Some difficult positions in the agricultural, forestry and industrial sectors are paid even lower than average. The profit percentage above revenue of private enterprises is equal to just 10 per cent of state-owned enterprises' and 40 per cent of foreign invested enterprises'. In contrast, the loss ratio of private enterprises is 25 per cent.
Main solutions
To motivate all sectors, the city will facilitate inhabitants expanding producing operations by offering the following solutions:
- Verifying and regulating the latest overall plans
- Building and ratifying projects on market development; establishing a centre of investment promotion.
- Disclosing lists of investment plans in all sectors
- Widely applying all forms of tendering projects and service supplies
- Submitting the complete procedures to private enterprises for use of spaces in small industrial areas and trade villages.
- Assisting entrepreneurs to build brands and apply new technology, and providing private entrepreneurs with more grants through development assisting funds and other sources.
- Developing e-government plans, fostering ISO application in administrative offices, intensifying application of the latest IT to solve business problems promptly. Through the e-port, Hanoi will provide enterprises with complete information on all aspects of the city, specifically on its policy, planning details, administrative procedures, infrastructure information and economic projects.
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